Pension officials plan Waikiki trip

Story by

Jennifer Gollan

San Diego County’s pension system is one of four across the state planning for officials to attend a May conference in Hawaii.

Some other agencies are skipping the Waikiki conference over appearances, although the conference’s website does offer a “2013 Attendance Justification Tool Kit” with “7 Tips for Building Your Case for Attending the Annual Conference.”

Four of the state’s 24 largest independent municipal retirement systems intend to send up to five board members each, a survey by California Watch found. The others attending are the counties of Contra Costa and Los Angeles and the city of Los Angeles.

Combined, the agencies are $17.5 billion short of the funds needed to pay long-term pension obligations, according to figures provided by the plans.

William Raggio, interim general manager of the independent Los Angeles Fire and Police Pensions, declined to send representatives to the National Conference on Public Employee Retirement Systems.

“I don’t plan on approving anyone to attend this conference given its location,” Raggio said in an email to his staff. “Hawaii is just not the right message to send at this time.”

Conference organizers expect about 1,000 trustees, money managers and consultants from across the nation to attend the conference at the Hilton Hawaiian Village Waikiki Beach Resort from May 19 to 23.

The San Diego County Employees Retirement Association estimates it will spend $7,950 to send three trustees: board Chairman David Myers, Vice Chairman E.F. “Skip” Murphy and alternate board member Tim Hancock. That includes airfare, conference registration and a five- or six-night stay at the resort.

Calls to Myers, Murphy and Hancock were referred to Brian White, the plan’s chief executive.

Through a spokesman, White issued a statement that said, “California state law requires board members to fulfill an education requirement. SDCERA assists board members in fulfilling this requirement to educate and continuously improve the knowledge and understanding of complex topics and trends involving the governance of a public pension fund. Educational seminars typically cover critical topics such as legal requirements, investing, and trustee ethics.”

He noted that the location was selected by conference officials, not SDCERA.

New training requirements went into effect in January. Under a law amended by the state Legislature last year, boards overseeing pension systems in 20 California counties must ensure board members receive 24 hours of education every two years.

Some pension plans encourage their trustees to attend seminars in state.

“We want to save money,” said Greg Frank, a management analyst for the San Joaquin County Employees’ Retirement Association. “We give the trustees classes to attend that are local, in places like Berkeley. It’s real easy to keep it in California and keep costs down.”

The bill’s author, Assemblyman Bob Wieckowski, D-Fremont, said he does not believe pension board members – or, for that matter, groups of trustees – need to travel to resort locations for training.

While the Hawaii conference would fulfill the requirements, so do programs set up through accredited academic institutions in California. Educational conferences scheduled over the next two years include those in Napa, Indian Wells, Sacramento and Monterey.

“I didn’t think that running up travel expenses and hotel rooms was a requirement of getting educated,” Wieckowski said. “We’re asking the public to show fiscal restraint. The cities and counties and the state are providing less services, and people are paying more taxes. So you would think these decision-makers would reflect that.”

An agenda for the conference shows most sessions end by early afternoon, leaving time for surfing, golfing, tanning or relaxing at one of the five swimming pools.

The conference website’s tips to justify attendance suggest that trustees emphasize how the conference could help them “build a networking list” and identify ways to help “save your fund money.”

The website contains a sample letter to help win approval for the travel, with statements such as, “Education is an ongoing obligation for all plan fiduciaries, and one I take very seriously” and “As a trustee for our pension fund, a great deal of responsibility rests on my shoulders.”

Document

Asked why pension officials need a tool kit to rationalize their trip to Honolulu, Hank Kim, executive director and counsel for the trade association organizing the national conference, said, “In hindsight, maybe ‘justification’ wasn’t the best choice of words.”

Critics of government spending – and some pension officials – say travel to exotic destinations by those overseeing pension funds is unseemly, especially as taxpayers watch public services diminish to offset growing pension costs.

“There’s no such thing as a free trip to Waikiki,” said Joe Nation, a professor of the practice of public policy at Stanford University, who specializes in public employee pensions. “Everybody loses; taxpayers will have to pay more, or beneficiaries will have to pay more, or a combination of the two.”

Nation, a former Assembly Democrat from Marin, added that the pension managers “would have higher returns and their beneficiaries would be better off if they were to forgo this trip or travel close to home.”

The conference in Hawaii was planned and booked in 2006, before the recent recession, Kim said. Still, organizers expect a strong turnout as trustees and money managers seek to gain an edge in a recovering economy.

“Being able to have discussions and network with pension officials from all over the country is one of the things that our members find most valuable,” said Kim, whose organization represents nearly 560 public pension plans nationwide.

Richard Cabral, a Contra Costa County board member who is going, said he doesn’t think current and future retirees view his travel as a boondoggle.

“The real big value is interacting with other trustees. It helps to get different points of view,” said Cabral, who also serves as president of the American Federation of State, County and Municipal Employees, AFL-CIO Local 512, a union that represents 300 employees in Contra Costa County.

Contra Costa County pension trustee John Gioia, who is not attending, questioned his agency’s plan to send four board members and an alternate.

“Pension trustees should exercise self-discipline and consider public perception in deciding which conferences to attend,” said Gioia, also a county supervisor.

Sessions are to include “Avoiding a Front Page Scandal at Your Pension Fund: Learning by Example,” and “How Do We Transform the Way People Think, Talk, and Act about Pensions?”

California Watch is part of the independent, nonprofit Center for Investigative Reporting in Berkeley and a media partner of U-T San Diego.